Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Bumble Inc. (NASDAQ:BMBL).
Is BMBL a good stock to buy? Hedge funds were taking a bullish view. The number of long hedge fund bets went up by 29 in recent months. Bumble Inc. (NASDAQ:BMBL) was in 29 hedge funds’ portfolios at the end of the first quarter of 2021. Our calculations also showed that BMBL isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In today’s marketplace there are numerous indicators shareholders put to use to grade their holdings. Two of the less known indicators are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the best investment managers can beat the broader indices by a very impressive amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Ole Andreas Halvorsen of Viking Global
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to review the key hedge fund action surrounding Bumble Inc. (NASDAQ:BMBL).
Do Hedge Funds Think BMBL Is A Good Stock To Buy Now?
At the end of March, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 29 from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BMBL over the last 23 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Citadel Investment Group was the largest shareholder of Bumble Inc. (NASDAQ:BMBL), with a stake worth $107.7 million reported as of the end of March. Trailing Citadel Investment Group was Viking Global, which amassed a stake valued at $69.8 million. Altimeter Capital Management, Tiger Global Management LLC, and Honeycomb Asset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Honeycomb Asset Management allocated the biggest weight to Bumble Inc. (NASDAQ:BMBL), around 2.8% of its 13F portfolio. Pinz Capital is also relatively very bullish on the stock, earmarking 2.1 percent of its 13F equity portfolio to BMBL.
Now, key hedge funds have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, initiated the most valuable position in Bumble Inc. (NASDAQ:BMBL). Citadel Investment Group had $107.7 million invested in the company at the end of the quarter. Andreas Halvorsen’s Viking Global also initiated a $69.8 million position during the quarter. The following funds were also among the new BMBL investors: Brad Gerstner’s Altimeter Capital Management, Chase Coleman’s Tiger Global Management LLC, and David Fiszel’s Honeycomb Asset Management.
Let’s go over hedge fund activity in other stocks similar to Bumble Inc. (NASDAQ:BMBL). These stocks are Digital Turbine Inc (NASDAQ:APPS), Freshpet Inc (NASDAQ:FRPT), Marriott Vacations Worldwide Corporation (NYSE:VAC), II-VI, Inc. (NASDAQ:IIVI), Sealed Air Corporation (NYSE:SEE), TCF Financial Corporation (NYSE:TCF), and Starwood Property Trust, Inc. (NYSE:STWD). This group of stocks’ market valuations resemble BMBL’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| APPS | 22 | 348515 | -1 |
| FRPT | 19 | 209522 | -6 |
| VAC | 24 | 604062 | 3 |
| IIVI | 39 | 267417 | 13 |
| SEE | 27 | 765215 | -5 |
| TCF | 13 | 398544 | -1 |
| STWD | 10 | 176663 | -3 |
| Average | 22 | 395705 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $396 million. That figure was $546 million in BMBL’s case. II-VI, Inc. (NASDAQ:IIVI) is the most popular stock in this table. On the other hand Starwood Property Trust, Inc. (NYSE:STWD) is the least popular one with only 10 bullish hedge fund positions. Bumble Inc. (NASDAQ:BMBL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BMBL is 62.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 22.8% in 2021 through July 2nd and beat the market again by 6 percentage points. Unfortunately BMBL wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BMBL were disappointed as the stock returned -11.2% since the end of March (through 7/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Bumble Inc. (NASDAQ:BMBL)
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Disclosure: None. This article was originally published at Insider Monkey.
